The U.S. apartment market is experiencing an unprecedented surge, driven largely by population growth and strong job markets in key regions. Seven metropolitan areas—Phoenix, Charlotte, Raleigh/Durham, Nashville, Jacksonville, Las Vegas, and Salt Lake City—have seen record-breaking apartment demand over the past year. This trend, highlighted by data from RealPage Market Analytics, offers a window into how demographic shifts and economic conditions are reshaping the multifamily real estate landscape. For investors and developers alike, understanding the dynamics behind this surge is crucial for navigating the opportunities and challenges ahead.
Population Growth and Economic Strength as Key Drivers
Population growth has been a fundamental factor fueling apartment demand in these seven markets. According to the U.S. Census Bureau, all seven areas have seen population increases at least double, and in some cases triple, the national average since 2017. This is particularly notable in Raleigh/Durham, Nashville, and Jacksonville, which have experienced growth rates exceeding 10% from 2017 to 2022—well above the national average of 3.1%. These demographic trends are creating a favorable environment for apartment demand, as new residents often translate into an increased need for housing.
Alongside population growth, strong job markets are playing a pivotal role. Each of these seven metro areas boasts job growth trends that exceed the national average and unemployment rates that remain below it. This economic vitality is drawing in young professionals, families, and remote workers who are attracted to the quality of life and economic opportunities in these regions. In many cases, new residents are looking for rental properties as they transition to a new city or choose to rent rather than buy due to rising home prices and interest rates. As a result, the combination of growing populations and vibrant economies is contributing to a sustained and increasing demand for apartments.
Record-Breaking Demand Across Markets
The data from RealPage is striking: demand for apartments in Phoenix, Charlotte, Raleigh/Durham, Nashville, Jacksonville, Las Vegas, and Salt Lake City has hit record levels year-over-year for the third quarter of 2024. In Phoenix, demand reached 21,563 units, while Charlotte saw 13,066 units absorbed. Raleigh/Durham logged 12,715 units of demand, with Nashville following closely at 11,408. Jacksonville (8,105 units), Las Vegas (7,681 units), and Salt Lake City (7,271 units) also experienced significant increases.
This wave of demand is not only noteworthy in terms of sheer numbers but also because it reflects a shift in the housing preferences of Americans. Many of these markets have benefited from the appeal of warmer climates, lower taxes, and the lure of suburban or exurban lifestyles, accelerated by the pandemic and ongoing trends in remote work. As urban centers evolve and adapt to these changes, suburban and secondary markets are becoming more popular choices for renters.
Supply Growth Keeps Pace in Most Markets
In response to the record demand, many of these metro areas are expanding their apartment supply at a pace well above the national average of 2.8%. Among the top 50 U.S. markets, the cities that have grown their apartment inventories the most in the past year include Austin (8.9%), Raleigh (7.8%), Nashville and Jacksonville (both 7%), Salt Lake City (6.5%), and Phoenix (5.6%). This robust construction activity is essential to meeting the surging demand, as a shortage of supply would likely lead to even more pronounced rent increases.
Las Vegas, however, has seen less of an apartment boom compared to its peers. This suggests that, despite its strong demand, the market may face tighter conditions in the near term. Investors should watch this market closely, as the imbalance between supply and demand could lead to significant price movements.
What’s Driving the Demand?
Several factors are converging to drive the record apartment demand in these seven markets. First and foremost is the sustained influx of new residents. Many cities in the South and West have become migration magnets, attracting people from high-cost, densely populated regions like California and the Northeast. This trend has been particularly pronounced among millennials and Gen Z individuals, who are seeking out more affordable living options, job opportunities, and a higher quality of life.
Job growth in these regions is another significant driver. Cities like Raleigh/Durham and Nashville have emerged as technology and healthcare hubs, attracting high-paying jobs and fostering an environment of innovation. Similarly, Phoenix and Salt Lake City have seen growth in sectors such as logistics, manufacturing, and finance, further boosting local economies and drawing in job seekers. Lower unemployment rates and a strong labor market are creating a favorable environment for apartment developers, as new residents often prefer to rent while they explore a new city or save for a home.
Moreover, lifestyle changes brought about by the pandemic continue to influence housing preferences. Many renters are seeking more space, modern amenities, and access to outdoor activities—all characteristics that the suburbs and secondary cities are well-positioned to offer. This trend is leading to record demand in markets that traditionally weren’t top-of-mind for renters, but are now appealing due to a combination of affordability and lifestyle factors.
Looking Ahead: The Future of Apartment Demand
As we move into 2025, these seven markets are expected to maintain strong apartment demand. RealPage’s analysis suggests that the substantial supply being delivered this year should help stabilize rents and prevent runaway price increases. Yet, given the ongoing population growth and economic strength in these regions, the demand is likely to remain elevated.
Investors should be strategic in how they approach these opportunities. Those focusing on high-demand markets like Phoenix, Charlotte, and Raleigh/Durham might consider targeting newer, amenity-rich developments that cater to a young and mobile workforce. In cities like Nashville and Jacksonville, where supply is expanding rapidly, investors could benefit from identifying value-add properties or exploring mixed-use developments that offer a blend of residential and commercial spaces.
Salt Lake City and Las Vegas present unique cases. Salt Lake City’s relatively high supply growth indicates room for continued expansion, while Las Vegas’s supply constraints suggest a potential for rising rents and tighter competition among renters. Investors interested in these markets should stay attuned to construction trends, population shifts, and economic indicators to make well-informed decisions.
In conclusion, the record apartment demand across these seven markets underscores a broader trend: people are on the move, and they are changing the face of American housing. Understanding the factors driving this shift—population growth, job opportunities, and evolving lifestyle preferences—is key to navigating the current landscape. As demographic and economic tailwinds continue to fuel demand, the U.S. apartment market remains an area of opportunity and transformation for investors.
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